Offset your family’s savings against your mortgage

May 25, 2009 by Brendan

News

Recently, we wrote an article about how much an offset mortgage could save you and how it works, and now the Offset Plus mortgage from the Yorkshire Building Society (YBS)has taken the offset mortgage product a step further in an innovative way.

An offset mortgage saves you money by countering your savings against the balance outstanding on your mortgage, even though the savings are still in a separate account and can be accessed instantly.

The YBS is now offering to link a savings account that belongs to parents or another family member to an offset mortgage, which means that parents can still help their children with their mortgage payment whilst retaining full control and access to their money. Up to two accounts can be linked to a mortgage. It means the savings will no longer earn interest but instead mean the mortgage monthly payment or total term will be reduced.

Head of Mortgages and Savings at YBS, Chris Edwards, said “With Offset Plus the money is not actually given to the borrower, instead it is deposited into the saver’s separate savings account, which is linked to the offset mortgage. The saver retains full control of their money and is able to make withdrawals and deposits at anytime in the usual way. Offsetting is also very tax-efficient, especially for higher-rate taxpayers as savers don’t earn any interest on their savings so they do not pay any tax on their offset plus savings either.”

The Offset Plus is just one of a range of offset mortgage options available.